This kind of situation happens in real life, and it certainly causes people to be seen differently by others, but that is only the beginning of how their lives will change. Most people will be envious of anyone in this position, but that doesn’t mean that they have necessarily solved all of their problems either.
So what does change, and what problems are you now faced with if you are the person at the center of this?
I will focus my comments on a “plain vanilla” family business situation for simplicity’s sake, but keep in mind that things can be much more complicated these days, with complex family structures that sometimes seem to be the norm with reconstituted families.
Let’s look at just three aspects of the new reality this person would face in the months and years after the business sale: the money, the person, and the family. Let’s call the person “Pat” for the sake of gender neutrality.
So Pat was recently running a business worth $50 million, and was probably doing a pretty good job, seeing as a company that size doesn’t typically run by itself. Good job, Pat. In comparison, running a $50 million pile of cash should be a walk in the park, right?
Well maybe yes, but not necessarily. The company surely had lots of qualified people looking after different departments. Money is certainly more straightforward, but it doesn’t manage itself either.
Pat may be surprised by how many new “friends” show up with great opportunities to invest part of that money, as well as how many experts materialize all of a sudden, each insisting that they are the best person for Pat’s particular situation.
Take your time, Pat, there is no big rush. Yes, you probably want to get your capital working for you, but taking a few weeks or months to figure out just how you want to manage your wealth is highly recommended. If any potential advisor tries to rush you, that is likely a sign that they are more interested in how your wealth can help them, and not you.
So Pat, what do you want to do? Travel, play golf, great. But what else?
Is there enough there to keep you challenged? People who work for someone else are often satisfied to no longer have to work for some A-Hole boss after they retire, and they can often be found on the golf course.
But Pat, you built a company, and now you sold it. I sure hope you already have some ideas of what you want to do with your time, some kind of projects, to replace the “work” part of your life.
Take a break, recharge, yes, great. But then what? I hope you will try a few new things and keep going until you find something that keeps the drive alive. Or better yet, you can find a few different “somethings”. Hint: Try volunteering. Plenty of good causes need good help.
Now this could be the toughest one of all.
Assuming that you have children, some of whom may have worked in the business, things have now changed for them too. Depending on whether or not they saw this coming, whether or not they remain with the company for some period, and whether or not they have marketable skills to find a similar job elsewhere, this is not something to dismiss lightly.
Please take the opportunity to share your thoughts with each of your children, individually and together, on how this sale changes things for them too. An attitude of “well, that’s their problem” is not very helpful.
If you have spent most of your time focussing on the business at the expense of spending time being a parent, maybe you can start to make up for that now?
When I wrote “share your thoughts” with your family, I wasn’t talking about a one-time event here, but regular contact. Get to know them each a bit better, treat them fairly, be a good parent, and help each of them become the best person they can be. Now there is a worthwhile project.